The Washington Independent
The Washington Independent

Showdown: Senate Dems Take on Obama, Baucus Over $80 Billion PhRMA Deal

In the middle of June, the White House forged a deal with the nation’s largest drug makers. As part of the bargain -- under which the pharmaceutical companies

Daniel James
News
Last updated: Jul 31, 2020 | Sep 23, 2009

In the middle of June, the White House forged a deal with the nation’s largest drug makers. As part of the bargain — under which the pharmaceutical companies offered $80 billion over 10 years in reduced drug costs to seniors and the government — the administration vowed to withhold support for a proposal allowing state governments to negotiate drug prices on behalf of the nearly 8 million folks who qualify for both Medicare and Medicaid.

It was an arrangement that was immediately and sharply criticized by liberal Democrats in both chambers, who are pushing to empower the states to haggle for lower prices. And last night, near the end of the opening day discussions over an enormous health reform bill in the Senate Finance Committee, we saw just how divisive an issue it is.

When Sen. Bill Nelson (D-Fla.) introduced an amendment providing cheaper drugs for the Medicare/Medicaid eligibles — an amendment that would effectively scrap the White House deal with the branded drug lobby — Democrats on the panel couldn’t endorse it fast enough.

Sen. John Kerry (D-Mass.) came first, saying the proposal “makes all the sense in the world.” Not to be outdone, Sens. Debbie Stabenow (D-Mich.) and Charles Schumer (D-N.Y.) quickly followed, the latter arguing that the current arrangement prohibiting negotiation, enacted by Republicans in 2003, was designed “simply to put money in the pharmaceutical companies’ pockets.”

“It’s hard to imagine an argument against [Nelson's amendment] that could be made publicly,” Schumer said.

But that didn’t stop several members of the panel from trying.

Sen. Charles Grassley (Iowa), the committee’s senior Republican, said the amendment — which Nelson says would save $86 billion over 10 years — “will raise prices for people with private insurance.”

“There is no free lunch,” said an impatient Grassley. “But these people talk like there is a free lunch.” He was talking about Democrats.

And Sen. Tom Carper (D-Del.) said it “just doesn’t seem fair” that Democrats would renege on the initial bargain with the Pharmaceutical Research and Manufacturers of America, or PhRMA.

“Whether you like PhRMA or not,” Carper said, “we have a deal.”

That comment brought a backlash of its own, with many Democrats quick to point out that they never agreed to any pact with the drug makers. “Congress has a right,” Kerry said, “to make a different decision.”

Sen. John Rockefeller (D-W.Va.), an original sponsor of the Nelson amendment, noted dryly that, “There’s nothing sacred about that deal.”

And Schumer argued that breaking a deal is only unfair if you thought the original deal was honorable to begin with. “How often do we side with interest groups,” he said, “and how often do we side with the average citizen?”

To that, Grassley responded that Democrats, then, “ought to be embarrassed for your president,” who forged the bargain.

Of note, Finance Chairman Max Baucus (D-Mont.), who reportedly has agreed to the PhRMA deal, was silent throughout the lengthy exchange.

The Finance Committee, Baucus said, will vote on the Nelson-Rockefeller-Kerry-Stabenow-Schumer amendment today.

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Daniel James | Daniel James is an author, keynote speaker, and entrepreneur who is a professional coach and gerontologist. Daniel holds a bachelor's degree from Georgia Tech, a master's degree from UCLA, a diploma in gerontology from the University of Boston, as well as a Professional Coaching Certification.

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